OPKO Health acquires FineTech Pharmaceutical

MIAMI—Just eight days after announcing on Dec. 21 that itwould acquire Nesher, Israel-based FineTech Pharmaceutical Ltd., multinationalbiopharmaceutical and diagnostics company OPKO Health Inc. announced that thesale had been closed. Upon the official closing of the deal, Dr. Phillip Frost,OPKO's chairman and CEO, said, "We look forward to working together withFineTech's talented personnel to develop our pipeline of proprietary peptoidsand other molecules for diagnostic and therapeutic products."

Although OPKO hasn't been trumpeting the cost of the deal,publications like Israeli business daily Globesand the South Florida Business Journalhave reported that the total cost was $27.5 million in cash andshares—reportedly, $10 million in cash and the rest in OPKO stock.

Although it didn't disclose specific information aboutFineTech's sales history, OPKO describes its new acquisition as "a profitableIsraeli company that develops and produces high-value, high-potency activepharmaceutical ingredients (APIs)." Founded by Dr. Arie L. Gutman, FineTech possessesproprietary technology and know-how in several important areas of organicsynthesis, and offers a full range of services from paper chemistry andlaboratory-scale development to pilot-scale and commercial production.

OPKO notes that it is staffed with a team of highlyqualified chemists "with vast experience in synthetic and analyticalchemistry," as well as possessing expertise in multistep syntheses, newpolymorph development and chiral and prostaglandin chemistry and havingstate-of-the-art laboratory, production and quality control equipment. Overall,FineTech's business model has been to develop complex and problematic APIs forsale or license to pharmaceutical companies in the United States, Canada,Europe and Israel.

"This acquisition is a good strategic fit for OPKO," Frostsaid when he first officially announced the acquisition plans. "FineTech'ssignificant know-how and experience with analytical chemistry and organicsyntheses, together with its production capabilities, will play a valuable rolein the development of OPKO's pipeline of proprietary peptoids and othermolecules for diagnostic and therapeutic products, while providing revenues andprofits."

Gutman, who will continue as CEO of FineTech subsequent tothe acquisition, said he looks forward to "the opportunities and challengesthat await us," adding that, "We expect continued growth of revenues andprofits from existing products and those in development. Our ability to developnovel processes for making complex synthetic molecules will make us a veryproductive and valued contributor to the OPKO business."

In other late 2011 news, prior to the FineTech acquisition,OPKO acquired Claros Diagnostics in mid-October, which brought into the companya novel microfluidics-based test system consisting of a disposable testcassette that resembles a credit card and a small desktop analyzer. Also, inlate September, OPKO agreed to sell its ophthalmic instrumentation business toOptos Inc., a medical technology company engaged in the design, development,manufacture and marketing of devices to image the retina of the eye, with Optosset to pay $17.5 million in cash at closing, plus future royalties.